What Is NFT Art? Understanding the Digital Revolution in Art

Introduction to NFT Art

You might not know how they work, but there’s a good chance you’ve heard about non-fungible tokens or NFTs. They became extremely popular in 2021 when a digital artist named Beeple sold one online for $69.3 million.

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NFTs are a type of digital asset that’s tied to the crypto blockchain, allowing digital artists to authenticate their work through encrypted tokens that are uniquely tied to a piece of digital art.

This guide will explain what crypto art is and where to buy and sell NFTs.

What Is an NFT?

An NFT is a token that represents a digital asset such as artwork. You buy and sell NFTs like you would other collectibles, except in this case, you own the tokens that represent ownership of the collectibles but you don’t own the collectibles themselves.

Understanding Non-Fungible Tokens

These tokens are considered non-fungible because you cannot exchange one NFT for another identical one. For instance, if you have one bitcoin, you can exchange it for another bitcoin and still have one bitcoin that is functionally identical to the first. Thus, bitcoin is a fungible token.

NFTs, on the other hand, aren’t interchangeable. Each has a unique digital signature, so no two are exactly alike.

Key Features of NFTs

NFTs are not like crypto, which can be denominated in smaller increments, such as fractions of a coin. NFTs are indivisible and each has a unique identity on the blockchain.

NFTs are also fully verified on the blockchain, with the unique token attached to a digital item that may live off the blockchain, such as a piece of digital art. This helps make authentication permanent and helps avoid ownership issues of digital creations.

What Is NFT Art?

When you buy an NFT, you receive a unique token that represents ownership of an underlying asset. The token exists on the blockchain, and the sale is tracked on the blockchain so that nobody else can claim ownership of the NFT.

Metadata describes what the NFT includes, such as a digital signature by the artist, and contains the transaction history. Each minted token comes with a unique identifier linked to an address hosted on a blockchain, such as Ethereum.

You can either hold the NFT in your wallet forever or sell it down the road. In some cases, the original creator of the NFT will get royalties from the resale.

NFT art is present on a blockchain, such as Ethereum, and is “minted,” or created, from digital objects that can represent intangible or tangible assets, such as:

Did You Know?

Even legendary tweets can be sold as NFTs. For instance, Jack Dorsey, the founder of Twitter, sold his first-ever tweet as an NFT for $2.9 million.

NFT Art Meaning

For artists, this means they can expand their source of income by tokenizing their work, whether it be digital art, memes, videos or music.

Artists can leverage smart contracts to ensure consistent income. A smart contract refers to a digital contract set in code, which can be programmed to execute automatically if certain predefined conditions are met.

Ultimately, NFT art allows digital artists to be recognized and authenticated. In the age of artificial intelligence and the “copy and paste” ability for digital art, NFTs help democratize art ownership and allow a new medium of creative expression to flourish.

How Does NFT Art Work?

NFT Art is digital art that is located on the crypto blockchain. The way it gets there is through a process called minting.

Creation of NFT Art

Crypto art is minted via smart contracts that then assign ownership to the creator and manage transferability. When you mint an NFT, you execute the code in a smart contract. Smart contracts must comply with specific standards, like the ERC-721.

As a result, the information gets added to the blockchain managing the NFT. The creator’s public key becomes a permanent part of that token’s history. That makes it possible for the original artist to receive royalties every time the NFT is sold.

For instance, platforms such as Zora and Foundation give royalties to the artists, 10% on resales, in the case of Foundation. Euler Beats Originals’ original owners get an 8% royalty whenever the NFT is resold.

Buying and Selling NFT Art

To purchase NFT art, you’ll need to have a digital wallet that can connect to an NFT platform or exchange, as well as cryptocurrency to make a purchase, usually Ethereum or Solana. Once you purchase an NFT, ownership is recorded on the blockchain and transferred to your digital wallet upon the sale of the piece.

If you want to sell an NFT, the process is similar. You’ll need to connect your digital wallet to an NFT platform, list your item, and pay fees. Once the sale is completed, your NFT will transfer to another person, and you’ll receive crypto in return, minus fees.

How To Get Started with NFT Art

If you want to create and sell your art as an NFT, or simply want to invest in NFTs, here’s how to get started.

For Artists

Traditionally, artists rely on an intermediary to make their work available to the public: galleries, record labels and publishers, for example.

For selling NFTs, artists can use different NFT marketplaces and platforms, such as SuperRare, Foundation, VIV3, OpenSea, NFT ShowRoom and Axie Marketplace.

You’ll need a digital wallet that can connect to the NFT platform, and some crypto to list and post your NFT art for sale. After the minting process, you usually have to pay a fee to each NFT platform to list your art for sale, and potentially showcase it on the platform homepage.

For Collectors and Investors

For art collectors, NFTs are a means of making profits. You can buy an NFT in the hope it will increase in value a few years down the line. Then you can resell it for a profit.

You’ll need a digital wallet that can accept NFTs and the correct cryptocurrency for purchasing an NFT. For example, the Solana blockchain has popular NFTs that require purchasing with the Solana (SOL) token.

Most NFT platforms allow you to research market data, including the NFT collection floor price, volume and overall popularity. Knowing which projects are taking off and how much people are paying for specific NFT art allows you to profit from picking up the right NFT art before the price goes higher.

Why Is NFT Art So Popular?

Before NFTs came to the surface, it was hard to cash in on making digital art. No one believed that digital artists could earn millions of dollars for a single artwork.

However, as NFTs became more mainstream, arthouses and artists started seeing the untapped potential of the digital art market. Sotheby’s, Christie’s and other fine art auction houses have opened their doors to digital art and held NFT exhibitions. Sotheby’s first NFT auction, which was held in April 2021 and featured work by the digital artist Pak, took in $16.8 million over three days.

Mike Winkelmann, commonly known as Beeple and the seller of the historic $69.3 million NFT discussed earlier, explained it in a School of Motion podcast: “The value is the scarcity, and other people want it. That’s it. If nobody wanted it, there would be no value.”

In addition to scarcity, digital artists can also collect royalties from secondary sales of their art. Most NFTs come with a royalty fee any time it is traded on the blockchain — helping artists get paid a percentage of each sale.

The Future of NFT Art

NFT prices crashed hard — along with the rest of the crypto market — in 2022. Billions of dollars of value were wiped out in months, and the hype died down pretty quickly. With the recent all-time high prices of Bitcoin and other cryptocurrencies, though, NFTs have become popular again.

AI-based art has risen to the forefront of the crypto world, and more interactive experiences like virtual reality are expanding the horizons of what NFT art can be. As technologies change and grow, NFTs continue to adapt to current trends, allowing artists to express themselves creatively while retaining ownership of digital art.

Ultimately, whether NFTs become highly valuable again or not, they are now a mainstay in the digital art landscape and help give new artists ownership and global reach.

FAQs About NFT Art

Here are the answers to some of the most frequently asked questions about NFT art.

• What is NFT art and how does it work?
  • NFT art is digital art that has been “tokenized” on the blockchain with a unique digital identification. This allows digital artists to create and own their online art, with the ability to sell it through crypto platforms and obtain royalties over time.
• How do artists create and sell NFT art?
  • NFT artists first create a piece of digital art, and then “mint” it as an NFT by attaching a unique identifier linked to an address hosted on a blockchain, such as Ethereum. The artists can then list the art on an NFT marketplace to sell. Ownership is digitally transferred to the buyer’s crypto wallet once purchased.
• • Is NFT art a good investment?
  • NFT art, like other cryptocurrencies, is a speculative investment that can go way up in value or drop to zero in a hurry. If you know the NFT art market well and do your research, you may be able to purchase NFT art and benefit from an increase in value. As with all crypto, though, NFTs can quickly become worthless.
• • Why is NFT art controversial?
  • NFT art is controversial because crypto is controversial. Some people see NFT art as cheating, as in making lazy digital art rare just for the sake of making a profit. Others simply aren’t fond of the idea of digital art selling for millions when physical art, which can take much longer to make and may require more physical skill, sells for much less.
• • How can beginners start buying or creating NFT art?
  • The best way to start buying NFTs is to get a digital wallet, load it with the right type of crypto — typically Ethereum or Solana — and using an NFT marketplace like OpenSea to browse and purchase NFTs you enjoy.

Scott Jeffries and Daria Uhlig contributed to the reporting for this article.

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What Is NFT Art? Understanding the Digital Revolution in Art

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